So who is really to blame? Greedy bankers, witless shareholders, dozy directors or lazy journalists? It is always nice to find someone to blame. But beneath the ruins of our financial system lurks a culprit more guilty than any of these. Us.
The so-called government rescue plan is a foolish mistake. Rotten institutions should be swept away, and those who chose to invest in them should pay the price. Yet we, the people, find this harsh reality unacceptable. Politicians know they must do something, or we shall vote for someone else.
So, institutions that have gambled and lost must be propped up, and their shareholders saved from the wipeout that should be their due. Depositors must have their savings preserved in full, however greedy they may have been.
It is happening this way because we expect the government to safeguard us from the
consequences of our actions, whether these take the form of over-borrowing, over-spending or even over-eating. We are no longer responsible for our own decisions: our advisers must give us foolproof advice; regulators must eliminate the risks of the marketplace. If we buy a pup, we have been 'mis-sold'. We have become infants. When we fall over, we insist that our leaders must pick us up.
But they cannot. All they can do is postpone pain, divert it and in the process magnify it. If taxpayers' enforced investment in our bombed-out banks was likely to pay off, it would not have been necessary. Instead, it seems bound to result in big tax increases that will deepen the impending depression. These will be followed, very possibly, by hyperinflation. The first will penalise the industrious, while the second will ruin the thrifty. In the end, we shall all pay a much-enhanced price for our own folly.
Maybe it serves us right. If we are lucky, however, it may at least teach us to grow up.
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